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Why It’s Important To Not Just Focus On Certified Diverse-Owned Businesses
Where do you look for diverse suppliers for your supply chain? Are you including categories that are not common for supplier diversity? Are you including countries where supplier diversity is not known (yet)?
While supplier diversity certification efforts play an important role in promoting inclusion and equity, it’s crucial for organizations to look beyond just certified diverse businesses when building their supplier diversity efforts, especially where there are no certification bodies available.
Here is why:
- Certification is not the only indicator of a high-quality diverse supplier
- Many diverse-owned businesses may not have the resources or capacity to go through the often lengthy and costly certification process, yet still offer excellent products and services
- Overlooking these suppliers means missing out on valuable partnerships and innovation
- Focusing solely on certified diverse suppliers risks excluding some underrepresented groups (ie also where certification is not available)
- Supplier diversity is about more than just compliance. It’s about fostering an inclusive supply chain that drives business value through increased competition, creativity, and community impact
Evaluating suppliers holistically, beyond just certifications, is key to realizing these benefits. Many large enterprises are now going beyond certifications and proactively seeking out diverse suppliers through targeted outreach, mentorship programs, and dedicated procurement portals.
While supplier diversity certifications are a useful tool and sometimes legally required, especially if you work with government agencies, organizations should cast a wider net to identify and engage diverse suppliers of all kinds which helps uncover a wider pool of qualified, diverse businesses to partner with. Certification should be just one factor, not the sole criteria, in building a diverse, high-performing supply chain.
An example from the transportation and logistics industry shows that; ”Diverse-owned carriers, who account for more than half of the transportation industry, carried just 0.07 percent of the industry’s total spend in 2021, a spend that exceeded $800 billion in the U.S. On paper, this makes the logistics industry a fruitful gap for supply chain leaders looking to increase their diverse spending; however, the reality is that many carriers struggle to communicate and position themselves for these opportunities…..”
The process to acquire diverse supplier certifications is time-consuming, expensive and often also confusing. Drivers are well aware of the potential benefits of securing their certification as diverse-owned businesses. This certification can open up opportunities to network with like-minded organizations and access new business opportunities. However, the process to obtain this certification can be cumbersome and present significant challenges for many drivers. Many drivers operate their businesses out of the cab of their truck, with no dedicated front office or administrative staff. This makes it difficult to navigate the often months-long process of paperwork and interviews required for certification. Drivers are frequently on the road, making it challenging to dedicate the necessary time and attention to completing the certification process.
